How can equity to get more cash flow?
How can you invest equity in existing free and clear rentals long-term to get more cash flow? Seems like today's cash-out rates are too high to get positive flow if you buy a turnkey rental, since rents where I've looked are below 1%. You can get a HELOC against it and use it for BRRR rehabs. But it's short-term and may or may not be better that getting hard money. Any other options? Any of those options more passive than investing in residential rentals? TIA!
This sounds like the notion to stack your equity against more properties. good approach, but you need to ensure you have room to stumble, otherwise your whole stack of cards may fall.
Take equity for downpayment, use income to increase your borrowing power. Also, this is highly dependant on local market and associated prices. Lots of paper millionaires back in 2008 who lost everything.
#4 All Forums Contributor
- Plymouth, MI
Are you asking if you can by a free and clear rental with a ll cash an not debt on it?
Quote from @Joe Villeneuve:
Are you asking if you can by a free and clear rental with a ll cash an not debt on it?
I want my equity to work by producing additional cash flow. I am open to any type of investment, not just buying more cash-flowing rentals, but I need this to be fairly passive. For example, I can't start flipping houses since I don't have enough hours in the day to do it.
#4 All Forums Contributor
- Plymouth, MI
Quote from @Ilya Z.:That doesn't answer my question.
Quote from @Joe Villeneuve:
Are you asking if you can by a free and clear rental with a ll cash an not debt on it?
I want my equity to work by producing additional cash flow. I am open to any type of investment, not just buying more cash-flowing rentals, but I need this to be fairly passive. For example, I can't start flipping houses since I don't have enough hours in the day to do it.
Quote from @Joe Villeneuve:"are you asking..." -- no.
Quote from @Ilya Z.:That doesn't answer my question.
Quote from @Joe Villeneuve:
Are you asking if you can by a free and clear rental with a ll cash an not debt on it?
I want my equity to work by producing additional cash flow. I am open to any type of investment, not just buying more cash-flowing rentals, but I need this to be fairly passive. For example, I can't start flipping houses since I don't have enough hours in the day to do it.
I am asking this: if you have a free and clear rental and you want to invest its equity into something real-estate related that would bring you more cash flow, what could this "something" be? It used to be just a few years ago that you could refi it and use that to buy more rentals. Now the refi rates are so high that this doesn't seem to be possible given rents you can get in my area. Are there other types of investments that would not require me to sell the current rentals, only refi? Another requirement is that it has to be about as passive, or more passive than, residential rentals. Make sense?
#4 All Forums Contributor
- Plymouth, MI
Quote from @Ilya Z.:You can still invest in RE.
Quote from @Joe Villeneuve:"are you asking..." -- no.
Quote from @Ilya Z.:That doesn't answer my question.
Quote from @Joe Villeneuve:
Are you asking if you can by a free and clear rental with a ll cash an not debt on it?
I want my equity to work by producing additional cash flow. I am open to any type of investment, not just buying more cash-flowing rentals, but I need this to be fairly passive. For example, I can't start flipping houses since I don't have enough hours in the day to do it.
I am asking this: if you have a free and clear rental and you want to invest its equity into something real-estate related that would bring you more cash flow, what could this "something" be? It used to be just a few years ago that you could refi it and use that to buy more rentals. Now the refi rates are so high that this doesn't seem to be possible given rents you can get in my area. Are there other types of investments that would not require me to sell the current rentals, only refi? Another requirement is that it has to be about as passive, or more passive than, residential rentals. Make sense?
Have you considered a syndication or an oil and gas mineral right royalty fund?
Investing in syndications as an LP is a form of passive investing.
In my opinion, even a turnkey rental is not passive. As you will need to still oversee the property management company.
Quote from @Dylan Speer:
Have you considered a syndication or an oil and gas mineral right royalty fund?
No. Never heard of such royalty funds. Will explore thx. Can you recommend any good sources of info about those?
Quote from @Ilya Z.:
Quote from @Dylan Speer:
Have you considered a syndication or an oil and gas mineral right royalty fund?
No. Never heard of such royalty funds. Will explore thx. Can you recommend any good sources of info about those?
I work at a real estate investment advisory firm and we specialize in selecting and underwriting syndications. Shoot me a private message, I'm happy to chat.